Wednesday, October 01, 2008

No Bailout!

Leave it alone and the marketplace will mend itself
Letter to Asheville Citizen-Times | October 6, 2008

I oppose the bailout.

The current economic crisis is not a failure of a (non-existent) free market. This crisis is a failure of 100 years of interventionist public policy that hampers the free market. Policy such as Smoot-Hawley, Sarbanes-Oxley, Community Reinvestment Act, Federal Reserve Act, Fannie Mae.

These are egregious interferences into the economy by the government that result in loss of wealth and liberty. The Community Reinvestment Act (1977), for example, allowed the government to coerce honest business-people into providing housing and mortgage loans to the riskiest Americans, who invest erroneously. The program paints a false picture of the economic and business environment that humans act in and which must, at some point, be corrected – usually painfully.

Dishonesty (faking reality) is the moral basis of these interventionist policies. Socialism isn't bad because it doesn't work; it doesn't work because it's bad -- that is, immoral.

We now propose rewarding these government and corporate failures with public plunder for private gain. We cannot expect a greedy and powerful federal government to reign in the leviathan political culture of economic interference and regulation that now, and inevitably, culminates in disaster.

Reject the bailout and allow the marketplace to operate freely.


Repeal the Bailout
Online resource for intellectual activism on the US Government's dangerous and immoral "financial bailout" policies. Inspired by outrage at Congressional passage of the 850 billion dollar Bush/Paulson "financial bailout bill" on October 3, 2008, Repeal the Bailout uncompromisingly opposes such legislation, advocates the repeal of any that may still be in effect, and calls for the removal from office of elected officials who support its passage.

Ron Paul on CNN 10/1/08 [video]

Bob Barr on "Your World w/Neil Cavuto. [video]

Bob Barr weights in on the attempted $700 billion bailout. [video]

DeMint Opposes Wall Street Bailout
U.S. Senator Jim DeMint (R-SC) | September 22, 2008
"Plan does not solve the problems that caused the current credit crunch, and could make them much worse.."

How Government Stoked the Mania
By RUSSELL ROBERTS | Wall Street Journal | Oct 3, 2008
Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.

Pressured to Take More Risk, Fannie Reached Tipping Point
Charles Duhigg | New York Times | October 4, 2008
With that self-assurance, the company announced in 2000 that it would buy $2 trillion in loans from low-income, minority and risky borrowers by 2010. All this helped supercharge Fannie’s stock price and rewarded top executives with tens of millions of dollars. Mr. Raines received about $90 million between 1998 and 2004...

Kill the Bailout
By Robert Tracinski | Real Clear Politics | October 02, 2008
Some cold, realistic scrutiny of the bailout is desperately needed because this plan is not just an attack on the free market. It is an attack on reality. The financial crisis was caused by more than a decade of using government power to rewrite the facts of reality and override the judgment of the market, and the bailout just offers more of the same fantasy economics...

The Long Road to Slack Lending Standards
By Steven Malanga | Real Clear Markets | October 01, 2008
What happened in the mortgage industry is an example of how, in trying to eliminate discrimination from our society, we turned logic on its head.

Financial Crisis and Recession
Jesus Huerta de Soto | Mises Institute | 10/6/2008
The severe financial crisis and resulting worldwide economic recession we have been forecasting for years are finally unleashing their fury. In fact, the reckless policy of artificial credit expansion that central banks (led by the American Federal Reserve) have permitted and orchestrated over the last fifteen years could not have ended in any other way.

An Open Letter to Members of Congress on the Financial Mess
by John Lewis | Capitalism Magazine | September 30, 2008
I oppose all bailouts of financial institutions by the US government. Government regulation and meddling is solidly to blame for this crisis. We must reduce government involvement in the economy now.

Ayn Rand Center's Response to Financial Crisis
ARC experts clarify the fundamental issues involved in the current crisis—the controls that led to it, the ideas that led to the controls, the destructiveness of the government response so far.

Economic Depressions: Their Cause and Cure
Murray N. Rothbard | Mises Institute | 10/2/2008
[...] But all parties agree that the fault lies deep within the market economy and that if anything can save the day, it must be some form of massive government intervention. There are, however, some critical problems in the assumption that the market economy is the culprit...

Don't Blame Capitalism
By Peter Schiff | Washington Post | October 16, 2008
...Absent from such conclusions is the central role the government played in creating the crisis. Yes, many Wall Street leaders were irresponsible, and they should pay. But they were playing the distorted hand dealt them by government policies. Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets.

Fannie Mae Eases Credit To Aid Mortgage Lending
Steven A. Holmes | New York Times | September 30, 1999
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's...